What can an accountant do?

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Stuart Jones, a practicing chartered accountant posed an excellent question on my blog entitled "Corruption - alive and well". He said:

I'm with you 100% Richard but what do I do to change things?

That got me thinking, because I admit that I am in the habit of saying a problem without a solution is merely a statement of fact. And I'm certainly not interested in simply observing corruption: I am interested in tackling it.

Of course, in my own work I do get some opportunities to do this. But I can hardly expect others to engage in the same way: it would be unrealistic to do so.

That does not mean there aren't things to do. You could of course join the Tax Justice Network. Membership is open to individuals. Please apply to John Christensen through john(at)taxjustice.net.

If this is not your bag then supporting Transparency International is an option. They appear to be reforming their approach to the corruption issue. It wold be good to have people who share the broader view that the Tax Justice Network holds on corruption within the UK chapter.

Then there is, of course, the option of engaging on the issue professionally. The professional institutes do not take the issue of corruption seriously. That's a big statement to make, but I happen to think it true. You will not find anywhere a statement from the ICAEW condemning the work of those accountants who work in the Channel Islands and the Isle of Man and who must have known that customers of the organisations they work for could not have been complying with the requirements of UK law with regard to disclosure of interest paid to them, now reported as a result of the UK tax amnesty. Why is that? Questions need to be asked.

And why has no member that I can ever recall been disciplined for setting up offshore taxation structures or trusts which transpired to have been used for illicit purposes? It is simply not possible for most trustees and nominee directors (and there are many accountants and lawyers who fulfil these roles in the Channel Islands and Isle of Man) to deny knowledge of this. After all, you cannot deny legal responsibility for what you do even if you act as a nominee. So why has no one been disciplined for this? It is inexplicable.

And there is the possibility of engagement with the organisations with which you transact. If you use one of the banks who had to make disclosure of details of those holding accounts with them in the Channel Islands and Isle of Man (and most in the UK will) then have you written to them to ask why they did not submit suspicious transaction reports to the island money laundering authorities regarding these customers who from July 2005 onwards asked that details of interest paid to them be withheld from HM Revenue & Customs and whose only reason fro doing so must have been intent to evade UK tax? Failure to report this is an offence in the Channel Islands.

And then of course there is the option of promoting tax compliance in your own work. In my experience this as an extraordinarily successful marketing practice. Clients like to think you're working to ensure they pay the right tax and no more, but with minimum risk. Try it.

Finally, all accountancy practitioners have the opportunity to tackle corruption head on. There is ample evidence that the self employed are the most systematic tax evaders in the UK, and it's about time the professions recognised this. It is thought possible that on average they do not declare up to 50% of their income in the US, and there is evidence to think considerable misreporting is commonplace here too. In that case, if in doubt you can refuse to act for anyone whose accounts you do not trust. And you can submit an SAR with regard to their records whilst asking them to move on.

So what can an accountant do? Quite a lot is my answer. I hope I have provided food for thought.